"The target is $18 billion in 2020 with a 40% ROCE. Now these are two very important constituents of our target. The company is guiding its stakeholders that look we will try for $18 billion top line provided we can guarantee ROCE of around 40% over a period of six-seven years. "ET Now | October 13, 2016, 13:27 IST

ET Now: Many of your plants are expected to get commissioned in the near term. What kind of growth can one expect?

Vivek Chaand Sehgal: I am sure it will very well as there are a lot of plants that have already been fructified and we have to wait till launches take place. The customer launches are happening one after the other and we are quite excited by this. I think the ramp up is always a process which is done based on the customer specifications but things are looking really good.

ET Now: You recently raised funds via the QIP. Will most of it go for expansion in the overseas market or are there other uses that slotted them for?

Vivek Chaand Sehgal: We go to market once in 10 years and pick up whatever is there, so that Motherson can commensurate its base, balance sheet. We went public in 1993-94 and then raised FCCB in 200-05 and now we have raised 4% approximately QIP. It is a routine thing. It is there to just shore up your balance sheet, make it more robust and as and when our fructification happens, these funds will be used and deployed. When we raised our FCCB in 2004-05, it was used in 2009. We are a very patient company and whenever the timing is right, we always raise funds.

ET Now: So talking about Samvardhana Motherson Peguform, do you see margins expanding moving ahead because we have seen a good performance here, what will be the key drivers here also?

Vivek Chaand Sehgal: The order book is very healthy and robust. All our plants are doing better. On the ROCE side, there is a lot of focus and that itself augurs well for us.

ET Now: You highlighted 30% to 40% of vision is going to be an $18 billion revenue company by 2020 and that is going to be achieved inorganically. How is the market placed currently for closing in some acquisitions?

Vivek Chaand Sehgal: So I have never given a guidance of $18 billion inorganic. The target is $18 billion in 2020 with a 40% ROCE. Now these are two very important constituents of our target. The company is guiding its stakeholders that look we will try for $18 billion top line provided we can guarantee ROCE of around 40% over a period of six-seven years.

This is a very important aspect which everybody should understand. What we try to say is that growth is possible. If you do not have ROCE targets, growth is very easily possible. The key point is to keep growing a CAGR of 28-30% a year and yet deliver ROCE in the excess of 40%. That is our target. There is a lot of consolidation taking place. We feel that these are within our space. So if the price is right, definitely we will do it.

ET Now: How is the company trying to diversify its customer base? Are there any new large orders from OEMs ex- Volkswagen group?

Vivek Chaand Sehgal: It is very important to understand that Volkswagen crisis was based on a particular engine which was already stopped somewhere around 2013-14. We have been saying for the last one, one-and-a-half years that it is of no consequence. It was something that happened in the past.

We really do not understand why anybody would want to go away from the largest car producer in the world. We do not want to be the largest producer number one. We believe that if you are de-risk, you are supplying different components, different countries, different customers, it is the best place to be and really that is exactly what we are trying to do. Hopefully by 2020, we will be 3CX10.